Sunday, January 27, 2008

A New Options Backdating Securities Lawsuit?

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It has been such a while since a new options backdating securities lawsuit has appeared that it was with some surprise I noted the new case that has been filed against Teletech Holdings and certain of its directors and officers. According to the plaintiffs’ counsel’s January 25, 2008 press release (here), the lawsuit, filed in the Southern District of New York, relates to the company’s November 8, 2007 press release (here), in which the company announced a "self-initiated review of accounting for equity-based compensation practices and likely restatement of prior period financial statements."

According to the company’s filing on Form 8-K (here), also dated November 8, the company delayed the filing of its quarterly report for the quarter ending September 30, 2007, due to the company’s Audit Committee’s review of the company’s "historical stock option and other equity-based compensation grant practices." The filing also states that based on the review completed to date, "management presently believes that it will be required to incur additional non-cash compensation charges for prior periods and that restatement of interim and annual financial statements for the periods 1999 through 2007 is likely." The filing also states that the company’s interim and annual financial statements for the period 1999 through the second quarter of 2007 "should not be relied upon."

In light of the TeleTech lawsuit’s allegations, I have, somewhat unexpectedly as this late date, amended my tally of options backdating-related lawsuits. The tally can be found here. With the addition of the TeleTech lawsuit, my count of options backdating-related securities lawsuits stands at 35.

Finding Orwell: I read with interest in the January 23, 2008 Wall Street Journal profile (here) of newly-appointed U.S. Attorney General Michael Mukasey that when he was a federal judge, Mukasey would require his new law clerks to read George Orwell’s essay, "Politics and the English Language." Orwell’s essay, which can be found here, is a declamation against the "vagueness and sheer incompetence" that Orwell believed to characterize contemporary prose, particularly political writing.

Orwell wrote that "the great enemy of clear language is insincerity. When there is a gap between one’s real and one’s declared aims, one turns to long words and exhausted idioms, like a cuttlefish spurting ink."

After providing many examples of bad writing, Orwell reduced his principles for clear writing to six rules, which undoubtedly are the reason Mukasey required his law clerks to read the essay. The six rules are:

1. Never use a metaphor, simile, or other figure of speech you are used to seeing in print.

2. Never use a long word where a short one will do.

3. If it is possible to cut a word out, always cut it out.

4. Never use the passive where you can use the active.

5. Never use a foreign phrase, a scientific word, or a jargon word if you can think of an everyday English equivalent.

6. Break any of these rules sooner than say anything barbaric.
Readers whose acquaintance with Orwell is limited to a barely remembered high school encounter with Animal Farm or 1984 and who may question Orwell’s continuing relevance today will want to explore Emma Larkin’s inestimable book Finding George Orwell in Burma (here).

Orwell (then known by his given name, Eric Arthur Blair) as a young man served for several years in the Burma in the Imperial Police Force, from which he resigned to commence his writing career. Not only was much of his inspiration drawn from his Burmese experiences, but, it turns out, his books anticipated the country’s current political condition. As Larkin notes, "Orwell’s description of a horrifying and soulless dystopia paints a chillingly accurate picture of Burma today, a country ruled by one of the world’s most brutal and tenacious dictatorships."

Larkin’s book about Burma and what Orwell experienced there is more than just a travelogue of an oppressed country. It is also a chronicle of the author’s own search for meaning in a lost place. The writing is compelling, occasionally brilliant. For example, she writes of a house she visited:

The interior was dark and cool. The front room was crammed with wooden furniture. An empty teacup sat on the arm of an old planter’s chair and the glass-fronted book cabinets were filled with old newspapers, their corners orange and crackling with age. Two grandfather clocks stood in opposite corners, each telling a different time.
In a few, spare stokes, Larkin not only vividly describes a specific place, she also manages to evoke an entire country where time is out of place and that is haunted by fading memories. It is the kind of writing Mukasey had in mind when he required his clerks to read Orwell’s essay.

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